According to the video AOD can go 100% foreign as opposed to AGD which has a limit of 80% foreign. AOD has put tax qualified lower as a priority than AGD. The bigger thing will be foreign dividends and its capture method for taking in more dividends.
The idea goes something like this; lets say you find three financial stocks that each yield 3%. Further, all three are on different dividend cycles; one goes ex-dividend on the Jan, April, July and Oct and the other two go ex-dividend on the other two cycles. Pretending everything else is static this idea could yield 9%. There are plenty of things to get in the way of this going perfectly but for now that is not the point.
Many foreign companies pay once or twice a year so depending on what you can find on the calendar, with no regard for taxes and the yield could up a lot. This is not going to yield 20% or anything like that but Alpine knows what they are doing as demonstrated by their other funds.
If it is not clear by now AOD is probably a better fit for an IRA.
One last thing, like all CEFs that come to market the underwriting fees are embedded in the price and so the fund will be at a premium to NAV for a while or maybe longer. AGD has traded at a premium its entire life, according to ETFconnect.
On a related note, Barron's had an article over the weekend about a Dogs of the Dow strategy for European stocks. I own several of the stocks listed in client accounts.
Regardless of how you access dividends for your account, a high yield is vital to make your job as your own portfolio manager much easier.
Too many OEFs come up short on yield, IMO.
7 comments:
What do you think about using a spanish etf as a proxy for south america, since spanish companies are often big players in that market. my thoughts are that the spanish etf would temper any volitility (risk) over the long run
"Many foreign companies pay once or twice a year so depending on what you can find on the calendar, with no regard for taxes and the yield could up a lot."
I don't understand this sentence.
I like what you say, when I can understand it. But often, you brain moves faster than your fingers.
Spain as aproxy for Latam? The correlation of iShares Spain (EWP) to iShares Brazil (EWZ) is 0.57 and ti ILF it is 0.62.
EWP has no commodity exposure (or if it does very little).
If you could find 12 foriegn companies that each pay once a year in different months and they all yield 4% you could get a 48% yield.
This is of course a idea taken to a silly extreme but that is the idea.
Least we not forget that on ex day the price of the shares is reduced by the amount of the coming dividned. Every quarter. Every year.
http://biz.yahoo.com/seekingalpha/070126/25208_id.html?.v=1
OT. Roger I realize that you do not favor buying etfs, or anything for short term holds, which I might consider as one month. Having said that could you help me understand the above commentary from seeking alpha's post on limit orders. For the life of me I can't grasp how a market order could ever be better than a limit order unless you want to be sure you get the order. Personally, Im moving away from etfs that trade less than 100k daily unless it is a long term hold of at least 6 months. I often split the bid and ask and come out ok. Why should I be doing mkt orders?
while I'm not sure I can out-debate him, I don't think he is correct. What he describes I think is a possible outcome but not something that happens very often if ever. As I read it he is describing inter-positioning which I don't believe is legal.
My instict would be to attribute the print action he describes as clear the book trades to accomodate large orders which is ok to do.
Post a Comment